Mind your own business

opinion: LIVE FROM LEEDS: 'Whitehall-watchers may be forgiven for stifling a yawn. Have we not been here many times before? Bringing top- flight business people into government has a long, if chequered, history'

Two unrelated, but nevertheless connected, events suggest that this government, like its predecessors, believes solutions to public sector management problems lie in the private sector. It is a naive view.

That management dilemmas abound in the public sector is not in dispute. These partly result from the intractable nature of the problems themselves, which can explain why they end up in the public rather than private sector in the first place. But Charles Leadbeater makes an important point when he claims that too much of the resources spent on public services goes on processing problems rather than solving or preventing them.1 He goes on to suggest that the risk-averse culture of public sector management is born of audit trails designed to prevent fraud.

He is also critical of the departmentalism that is rife in public organisations, which prevents or inhibits the cross-fertilisation of ideas. Combined with heavy-handed management systems, the upshot is a public sector that often falls well short of its potential. Rightly, Leadbeater does not fall into the trap of insisting that the private sector always does things better or does not itself suffer from the sclerotic practices found in the public sector.

The other pertinent development is the appointment of Lord Simon, relieved of his ministerial duties, to lead a review of management practices at the centre of government with the aim of applying to the civil service the principles of delayering and downsizing introduced at BP, from where Lord Simon came. His brief is a response to the prime minister's impatience with the performance of the government machine in achieving his policy objectives.

Whitehall-watchers may be forgiven for stifling a yawn at this point. Have we not been here many times before? Does anyone recall the never fully implemented Fulton report on civil service reform in 1968, with its recommendations on strengthening management capacity? Bringing top- flight business people into government has a long, if chequered, history.

Remember Lord Rayner from Marks & Spencer and his 'Rayner efficiency scrutinies'? Nearer home, the NHS was subjected to the searching gaze of Roy Griffiths from Sainsbury. Indeed, he hung around longer than most of his kind and came to see over time just how complex and politicised management in the public sector is.

And this is precisely the point. There is no generic approach to management which suggests that what works in one setting can readily be transferred to another. Moreover, given the endless round of fads and fashions which pass for sound management practice, is it not always the case that government latches on to these just as they become discredited in the private sector?

Two classic examples are performance-related pay - which the government stubbornly persists in believing is what the public sector needs, despite all the evidence to the contrary from the private sector - and delayering and downsizing, which has been abandoned in the private sector following a serious loss of talented and experienced personnel.

But isn't the government committed to family-friendly workplace policies? And won't performance-related pay result in new bureaucratic management systems making yet further demands of hard-pressed managers? Not much evidence of 'joined-up' policy here.

Let's return to Leadbeater's analysis of public sector organisations expending their energies and resources on problem-processing rather than problem-solving.

Ironically, given its genesis in the stubborn persistence of problems in public services, much of the government's modernisation agenda risks compounding the dilemma. Take health action zones. Without in any way pre-empting the findings of the evaluation industry that has mushroomed around these, anecdotal evidence abounds that far from contributing to finding and implementing solutions to problems, HAZs may actually be hampering those efforts and diverting scarce management resources into dealing with ever more complex organisational webs and interfaces. In short, rather like the last government's internal market reforms, the transaction costs threaten to overwhelm any beneficial outcomes.

The nub of the problem is the role of politicians in public sector management. It is also the bit of the analysis that often escapes the scrutiny of the public sector's critics, including Leadbeater. If there is a risk- averse culture in the public sector and a lack of delivery, then much of the responsibility must lie with ministers who invariably see themselves as the chairs and chief executives of the empires they oversee. They want results that put them in a good light, with no mistakes and no embarrassments.

It is not only audit trails which inhibit innovation and creativity from flourishing but a climate of fear induced by ministers who insist on things being done their way. Little wonder, then, that public sector managers retreat into their bunkers. It is the only comfort zone they know.

So if the prime minister really wants to reform the culture of public sector management, then rather than rushing prematurely to apply misconceived private sector solutions, he ought first to understand why these problems arise. Because therein lie the seeds of the solution - a solution that is to be found within the public sector.

It entails ministers exercising a self-denying ordinance and, having set the strategic direction and policy parameters, meddling less with the details. Ministers should let managers manage and trust them to get on with the job. At present, they don't, with the result that we have an expensively paid cadre of administrators who endlessly process problems while the solutions prove as elusive as ever. REFERENCE

1 Leadbeater C. Living on Thin Air: the new economy. London: Viking, 1999.

David Hunter is professor of health policy and management at the Nuffield Institute for Health, Leeds University.

Financial penalties are being lifted from high-profile standards including cancer and elective waiting times, so far without attracting much attention. How is this happening? And will it work, asks Rob Findlay